High Court held that If a mortgaged property is sold by the Bank for loan repayment is later found to be disputed, the authority sanctioning the loan cannot be held liable.
The Division Bench Of Chhattisgarh High Court comprising Chief Justice Ramesh Sinha and Justice Smt. Rajani Dubey was hearing a petition and observed that If a mortgaged property is sold by the Bank for loan repayment is later found to be disputed, the authority sanctioning the loan cannot be held liable, as they are protected under Section 32 of the SARFAESI Act.
In the case heard by the High Court, Mr. Sharad Mishra, representing the petitioner, sought to quash FIR No.507/2018 against the petitioner under Section 482 of Cr.P.C. The petitioner, a Deputy General Manager at Punjab National Bank, was accused of offences under Sections 420, 467, 468, 471 & 120 (B) of IPC for actions related to a loan facility.
The petitioner had sanctioned a loan to M/s Sharma Vin Trade Services Pvt. Ltd., secured against mortgaged property. The borrower defaulted, leading to legal actions by the bank. Subsequently, respondent No.2/complainant, involved in a dispute with the borrower, filed an FIR against the petitioner and others, alleging irregularities.
The petitioner argued that the allegations were civil in nature and that the FIR was an attempt to halt legitimate recovery proceedings. Respondent No.2 countered with claims of forgery and conspiracy involving bank officials, including the petitioner.
After hearing arguments, the High Court deliberated on principles laid down by the Supreme Court regarding quashing of FIRs. It observed that the dispute primarily concerned the borrower and respondent No.2, with the petitioner being a bank official carrying out duties in good faith. The Court noted that the petitioner had not been prosecuted by the bank, indicating a lack of criminal intent on his part.
Ultimately, the Court quashed the FIR against the petitioner, citing protection under Section 32 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, and the absence of grounds for criminal prosecution. The proceedings against other accused parties would continue.
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